Customer acquisition only works economically when customers generate enough contribution to cover what it costs to win them. Use this calculator to compare acquisition costs with a repeat-purchase model for ecommerce or service customers.
How to use this calculator
Choose a defined acquisition cohort and enter its total acquisition costs and number of new customers. Estimate average order value, total orders over the customer relationship, its duration in months, and contribution margin before acquisition. Keep revenue assumptions separate from contribution.
Formula and assumptions
CAC = acquisition costs ÷ new customers. Lifetime revenue = average order value × total lifetime orders. Lifetime contribution = lifetime revenue × contribution margin. Modeled payback months = CAC ÷ average monthly contribution.
Worked example
$5,000 acquisition costs for 100 new customers gives a $50 CAC. Four lifetime orders at $60 each produce $240 revenue. At a 40% contribution margin, lifetime contribution is $96, or 1.92× CAC. Spread evenly across 12 months, payback is 6.25 months.
Common questions
Why use contribution instead of revenue for LTV?
Revenue does not account for what it costs to fulfill an order. Contribution LTV makes the acquisition comparison more useful by deducting the variable costs represented in your entered margin.
Is this measured customer payback?
No. Payback assumes contribution arrives evenly over the entered lifetime. Real cohorts can purchase unevenly, return items, or behave differently. Validate assumptions against actual customer history. Zero acquisition cost makes the ratio undefined.
